US to coordinate with other governments on business and human rights

New plan promises to develop due diligence rules for investors and strengthen grievance mechanisms

The US Government has vowed to “strengthen policy coordination around business and human rights with other governments” as part of a new National Action Plan (NAP).

In the 40-page document, the government said it will “leverage our resources to strengthen responsible business conduct and encourage business to address adverse business impacts, including on human and labour rights and the environment”.

It contains no concrete legislative proposals, instead focusing on increasing the level of consulting and information-sharing it does with other governments, “as well as consideration of joint policy initiatives around topics of mutual interest”.

The action plan comes as the EU moves into the final stages of passing its Corporate Sustainability Due Diligence Directive, which will force large companies to take responsibility for monitoring and mitigating human rights abuses that take place within their supply chains.

US trade bodies have reportedly lobbied hard to stop those rules from going through because, as two Oxford professors warned in a blog in 2022, they “would expand the extraterritorial reach of EU law in areas that are both highly politically sensitive and key to any country’s choices on how to ensure its firms’ international competitiveness”.

However, in the NAP, the government stated that human rights due diligence “should be an integral part of decision-making and embedded into existing risk management systems with support from the highest levels of the business” for all companies, regardless of size or sector.

Due diligence should cover companies’ entire value chains, it added, and be in line with internationally-recognised standards such as the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises on Responsible Business Contact, and the International Labour Organisation’s Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy.

“Businesses should treat these standards and principles as a floor rather than a ceiling,” it added.

However, the NAP acknowledges that “value chain opacity, traceability challenges, lack of guidance from governments, conflict, and weak rule of law in many of the countries where businesses operate, all make it difficult for businesses to carry out effective due diligence”.

To combat this, the US Department of State has set up an advisory committee to help it develop tools to strengthen due diligence practices, review existing reporting and whistleblowing mechanisms, and integrate human rights considerations more deeply into public procurement decisions.

The government will also publish due diligence guidance for investors in technologies “that could enable or exacerbate human rights abuses” and for companies doing business in places and sectors with heightened human rights risks.

In a bid to ensure stakeholders have more effective access to remedy, the NAP commits the US to strengthening its National Contact Point, which handles complaints about entities contravening the OECD Guidelines.

The Government will promote the NCP more widely, offer more protection for complainants, and update its policies to bring them in line with the latest version of the OECD Guidelines, it said.